Risk Management Strategies, Innovation and Business Ethics on Firm Performance

Midikira, Churchill Kibisu


The success of any organization depends solely on how that organization manages its risks. This may be achieved through many avenues such as efficient management and adequate decisions in resource allocation, clearly defined risk management objectives both pre-loss and post-loss objectives. Whereas some organizations may not consider profitability as their main objective, yet they must generate sufficient resources from business operations in order to achieve their objective of service delivery and maximization of profits. They must, therefore continuously identify risks, mitigate them in order to achieve a competitive advantage over similar organizations. Strategic decisions are likely to be complex in nature and the complexity is a defining feature of strategy  and strategic decisions; Strategic decisions may have to be made in situations of uncertainty; Strategic decisions are likely to demand integrated approach in managing organizations; The organization may have to manage and perhaps change relationships and networks outside the organization; Strategic decisions will very often change in organizations which may prove difficult because of culture. It is in this light that business organizations take their strategic decisions. Porter has alluded to strategy being basically addressing competitiveness. In this regard, businesses are likely to compete for resources which will impact on their performances. These strategies will be supported by the organizations’ ability to be creative and innovate new approaches of doing business and exhibiting high standards of ethical behaviour.  Understanding of competencies and cultural underpinnings of business is expected to have a far reaching influence on the risk management and strategies to be adopted in order to effectively compete in the market place. The implication of this study on business is that appropriate risk management strategies, effective innovation and ethical behaviour may influence policy formulation that will guide business organizations to improved performance

Key words: Risk Management Strategies; Innovation; Ethics; profit maximization and Performance

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